The FBI raided the apartment of two University of Michigan students to investigate "potentially fraudulent sales or purchases of virtual currency that people use to advance in the popular online role-playing game World of Warcraft."

Two students, a sophomore and a junior, share a University Towers apartment in Ann Arbor, Michigan, but claim the feds have the wrong people as neither of them even play WoW. Records show that "laptop computers, hard drives, video game systems, credit cards, a cell phone, paperwork and other computer equipment" were seized. The college sophomore told AnnArbor.com, "They thought we were involved in some kind of fraud. I'm pretty sure they have the wrong people, but they took all my stuff."

Federal Court records show that the FBI agents are investigating potential gold farmers which are people who get virtual currency and then auction or sell it for cash. Investigators believed at least one person was involved with a "scheme to set up fraudulent bank accounts to buy and/or sell 'virtual currency' or 'gold' to be used in the game." Specifically, agents were looking for online transaction records associated with WoW, the Chinese gold-farming website gameusd.com, eBay, PayPal and the United Services Automobile Association.

Searching for more about gold farmers led me to a Canadian study, Botnet Analysis Report, that also has bizarre tidbits besides focusing on botnets. On page 122 of the Scribd document, it mentioned a "dark universe" where terrorists or "targets of interest" have moved their operations. "Virtual world terrorism facilitates real world terrorism: recruitment, training, communication, radicalization, propagation of toxic content, fund raising and money laundering, and influence operations." The report claims that inside virtual worlds, terrorists have modified games to make Allied troops the default enemy so would-be terrorists could be recruited and trained.

The Canadian report doesn't stop there, adding that these games are used for state-sponsored espionage. The player-to-player text and VOIP chat are used for:

covert communication between cells, illegal agent networks or the ephemeral clans' or guilds' in MMOG. These environments allow players to conduct real-money transactions (RMTs) in virtual worlds and permit the unregulated currency exchange of virtual credits for real funds. Gold farming' and power levelling' operations of criminal organizations are some of the novel means of exploiting the medium. The encrypted exchange of zero-day network exploits is present as is the out-of band control and tasking of bot-nets.

The Canadian report mentioned intentions to build a program to "watch terrorism, crime and espionage," in virtual worlds much like the U.S. Reynard Project but to monitor at a "much greater depth."

More poking around found this Reynard Project [2009 PDF] document about funding opportunities and innovation solutions for Reynard, looking for ties between Real Worlds (RWs) and Virtual Worlds (VWs). It encouraged finding out why people select certain VW avatars and what that might reveal about the gamer in real-life. Could the activities or communications of VW avatars reveal indicators about the RW people? According to this IARPA solicitation, the Reynard Program was "envisioned to begin in the fourth quarter of Fiscal Year 2009 and end by 2012."

It is unclear if U.S. intelligence agencies believe gold farmers are some level of terrorist or just criminals. However, the FBI raiding the University of Michigan students allegedly connected to WoW and gold farming may indicate that the Reynard Project is alive, kicking, and still hunting for terrorists inside your favorite MMORPGs.